Y: A good summery of an interesting debate. Heterodox economists who are always criticizing methodological problems of mainstream economics are required to propose a third interpretation / understanding on the actual state of American economy. Similar analysis is also possible for European and Japanese economies which are also stagnating roughly speaking.
A point of my doubt on David Rucio’s argument is the very place that Garrett Connelly has cited (first citation). I admit that the present capitalism has some “inherent instability or its tendency”, but pointing this is not sufficient. We should also show why capitalism (or national and world-wide economy) normally works sufficiently well. We have to present a theory that can explain both aspects of capitalism (instability and stability). We must explain how and where the economic situation in an aspect changes to the other aspect.
Me: Excellent point Yoshi. Private Finance Capitalism is unstable because it enforces a virtual monopolistic paradigm of Debt Only for the sole vehicle and form for the distribution of credit/money. Normally this is mistaken as stability because we’ve swallowed the idea of the business cycle and the notion of general equilibrium. Every severe financial crisis has been preceded by a period where Finance, due to the belief that these two factors are “normal” and relatively benign, has taken leave of its moorings and run up unsustainable indebtedness. Keynesians think they can tweak the system into stability with more governmental spending and libertarians and conservatives think they can wring stability out of it by austerity, but neither of these actually does anything to resolve the monopoly paradigm which is at the base of the problem. With AI inevitably reducing aggregate individual incomes, corporate giantism becoming increasingly “necessary” and monetary inequality still considered a norm tweaking and palliatives are not going to bring us back to the relative “stability” of the period before the GFC.
It requires a new paradigm. One that reflects the heavy handed method of the ancients for dealing with the problem, i.e. debt jubilees and assassinations of those who opposed such, and yet with deeper insight into the digital natures of the pricing, debt based money and accounting systems is more humane, integratively effective and knowledgeable.
And that new paradigm is Direct and Reciprocal Monetary Gifting.
Y: Dear Craig
Your paradigm is concerned with social and economic policy. I believe there many things to do before talking about policies. Stability/Instability first concerns about understanding what happens in the actual economy.
Me: Yoshi, Well, I disagree. As I have pointed out here numerous times a paradigm is a single concept that represents and creates an entirely new pattern….whose logically derived policies…simply follow from it. Consequently, discovering that single concept….is everything policy-wise.
In fact, as I have also pointed out here numerous times the fact that the best heterodox and progressive economists suggest policies based upon and reflective of aspects of grace as in monetary Gifting…and yet do not have but the foggiest notion of the aspects and/or definitions of that philosophical concept… demonstrates why their follow through policy thinking is handicapped and incomplete.
As Maslow and other trans personal psychologists have pointed out self actualization/personal knowledge of a philosophical concept is normally very difficult if not impossible when one’s level of personal (or in this case economic) reality is consumed by insecurities, conflicting theories/data and doubts. Or, as is also the case for economic theorists….they simply aren’t looking in the places that could have enlightening insights and thus they miss them.
And that is why and where the integrative mindset and mental skill sets of wisdom/paradigm perception become so important because mentally they require, combine and habituate “looking through both ends of the telescope” which again reflects the nature of new paradigms and the mental process of Wisdom.
As for what is “actually going on in the economy” I couldn’t agree more. And what could be more focused on the moment to moment goings on in the economy than the codified and classified exchanges of buying and selling recorded by double entry bookkeeping? What could be more informative than the fact that the pricing, debt based money system and double entry bookkeeping are all digital in nature, that is equal amounts of debits and credits sum to zero, as does equal amounts of free and available money and prices and equal amounts of money and debt? And if one wants to have an effective monetary and economic policy then would it not be best (digitally) implemented at the terminal summing point for all costs and so all prices for any item or service in the economy as well as at both the terminal ending point for the entire legitimate economic/productive process and the terminal expression point for all forms of inflation? Such summing, ending and expression points have powerful aggregative, algebraic/arithmetic and problem resolving effects.
DT: Craig, a paradigm is not a single concept. It is rather the embodiment of a system of concepts: an example like Newton’s cosmology in which one can observe the interaction of the variables – here position, change of position in time, rate of change of position in time (acceleration) and the force generating (or as Young put it, controlling) the acceleration (in that case gravity).
Are you not still thinking monetary system wide rather than person and product wide when you say “And if one wants to have an effective monetary and economic policy then would it not be best (digitally) implemented at the terminal summing point for all costs and so all prices for any item or service in the economy as well as at both the terminal ending point for the entire legitimate economic/productive process and the terminal expression point for all forms of inflation?”
Me: Dave, As I have repeatedly said here it is BOTH a single concept AND an entirely new pattern….created by that single concept and the logical and relevant policy applications of the single concept’s aspects throughout the system/body of knowledge/area of human endeavor that the paradigm applies to.
A digital policy of a 50% discount for every product and service at the point of final retail sale immediately doubles everyone’s purchasing power. In other words where a person yesterday had to spend $100 to buy $100 worth of goods now they have $100 worth of goods and still have $50 left in their pocket that they can either save or buy their wife a huge bouquet of flowers and a boatload of snickers bars.
So what’s not to like about that from an individual perspective?
And of course the rebate of the $50 discount back to the retailer giving the discount makes him/her whole on their overheads and profit margins so they are not harmed in any way by the discounts they give….and of course they’re benefited by the fact that twice as much actually free and available individual incomes now exist…to become someone’s business revenues. It’s all upside for every agent individual and commercial and for the system as a whole.
Finally, as the policy is implemented at the terminal expression point for all types of inflation, hyperinflations do not occur except under catastrophic circumstances and garden variety inflation is “good” at 2-3% this single policy has miraculously (from an orthodox non-paradigmatic economic perspective) not only painlessly but beneficially integrated price deflation into profit making systems…..because consumption is the terminal ending point of the entire legitimate economic/productive process for any item or service. In other words you get to eat it, drive it, live in it, wipe your butt with it, text with it or surf the internet with it….and no one has the right to make you pay anything more for it (except Finance which [hint, hint] is additional costs post retail sale).
Direct and Reciprocal Monetary Gifting is Helio-centrism and Agriculture-Homesteading. And hopefully, if we bump two neurons together and acculturate employment and purpose instead of employment only, action and contemplation instead of almost entirely action then the further paradigm shift from science only to both science and wisdom will enable homo sapiens to emerge from its lingering adolescence and fulfill its species designation of wise and discerning man.